Keywords Studios sells for £2.1 billion in £24.50-per-share EQT buyout

• Keywords Studios will be bought out by EQT for £24.50 per share, equating to a £2.1 billion valuation
• Keywords is unanimously recommending shareholders to vote in favour of the deal

Private market investments organisation EQT has made a deal to acquire Keywords Studios for approximately £2.1 billion, buying up shares in the Irish video games company at £24.50 each.

The deal has been agreed at a significantly higher price than EQT initially proposed with a premium to the undistributed share price.

This means a 96% premium to Keywords’ average share price in April 2024 and a 67% premium to the closing price on May 17th, 2024, the final day of trading before a potential offer from EQT was announced.

Keywords directors plan to unanimously recommend shareholders to vote in favour of the deal, suggesting that the offer is "in the best interests of all stakeholders" with "strong" long-term prospects for Keywords.

On the up and up

Keywords rejected four offers from EQT before the investment firm offered a significantly higher sum of £25.50 per share. On this basis, Keywords and EQT entered "advanced talks" this May, and though the final deal struck is for £1 less per share, at £24.50 each, this remains significantly higher than earlier proposals.

The deal has been struck following Keyword’s own M&A expansion strategy. Keywords' total deals were to the value of $145.8 million across 2022 and 2023, across five acquisitions including games developers Hardsuit Labs and The Multiplayer Group, AI-driven platform Helpshift, communications agency LabCom, and influencer agency Digital Media Management.

All these acquisitions, contributing to Keywords’ growing stature in the industry, have ultimately drawn EQT’s attention and led to its own acquisition.

The final deal

"Since its IPO in 2013, Keywords Studios has delivered exceptional growth both organically and through a successful M&A strategy, transforming the business into the only truly global provider of fully integrated creative and technology-enabled solutions to the video games and entertainment industries," said Keywords Studios chairman of the board Don Robert.

"Whilst the board expects the continued execution of Keywords Studios’ strategic objectives and its leadership position to create significant value, the board is also mindful of the near-term challenges in the broader video games and entertainment industries, as well as other longer-term uncertainties, which have caused volatile returns for Keywords Studios’ shareholders over the past 15 months.

"On balance, the board believes that this offer represents a good opportunity for Keywords Studios shareholders to realise value for their investment in cash upfront at a significant premium to the undisturbed share price."

Keywords Studios CEO Bertrand Bodson added: "This offer from EQT marks an exciting new chapter on our growth journey, with a like-minded partner who possesses deep sector expertise and a desire to accelerate the pace of our growth, both organically and through M&A, to unlock the many opportunities ahead of us across the entertainment landscape.

"I am convinced that together we will be able to strengthen our leadership position at the heart of the largest entertainment industries in the world and build a truly unique global integrated games services platform for the benefit of our people and clients.”